For government, most market activity can be explained by the goal of:
A. Welfare maximization.
B. Social responsibility.
C. Utility maximization.
D. Charitable responsibility.
Answer: A. Welfare maximization.
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Why are suburban stores more likely than downtown stores to provide free parking for their customers?
A) Fewer people drive their cars to downtown stores than to suburban stores. B) Suburban people are more addicted to the automobile than are inner-city residents. C) The cost of using land is higher in the downtown area. D) There is not much land available in the downtown area.
When a primary dealer sells a government bond to the Federal Reserve, reserves in the banking system ________ and the monetary base ________, everything else held constant
A) increase; increases B) increase; decreases C) decrease; increases D) decrease; decreases
The minimum amount of reserves a bank is required to hold is known as
A. Total reserves. B. Required reserve ratio. C. Excess reserves. D. The money multiplier.
The multiplier shows that as __________ changes, real GDP changes by a __________ amount
a) induced expenditure; larger b) induced expenditure; smaller c) autonomous expenditure; larger d) autonomous expenditure; smaller